Five ways HR can unite with other functions

Published 23rd May 2018 by Investors In People

Linking engagement with customer experience (HR and marketing)

Numerous studies have shown a relationship between employee engagement and customer satisfaction. A study out of the Delft University of Technology [PDF] found that employee performance is positively related to customer loyalty, for example, while another study found that retail customers scored higher on measures of engagement when they bought from departments with high levels of employee engagement.

The opportunity for HR and marketing is to connect the strategy, process, measurement and optimisation of employee and customer engagement. By connecting employee engagement with an established business metric like customer experience, HR is more likely to get senior leader buy-in for engagement efforts, while the marketing department is better able to influence key levers internally that will help turn the dial on their customer engagement metrics.

The relationship between cost and performance (HR and finance)

Finance relies on hard data, which lacks context, to make decisions. HR can put the meat on the bones of non-contextual data that finance holds. For example, if a unit is underperforming relative to its human capital cost base, the finance department may not realise there’s a management problem within the team and instead look to cut costs. HR can help identify the problem, implement a solution and avoid redundancies being made.

By combining HR metrics and finance metrics the organisation is better enabled to forecast future resource needs based on cost, strategy and key goals. Cloud-based systems are enabling this process and providing joined-up dashboards, reducing the manual interventions necessary and increasing the efficiency of both departments. By forecasting and tracking costs better, the business becomes more stable.

People data gives organisations insight that can be used to optimise how and where work is taking place, as well as who should be doing it.

The detrimental effects of poor wellbeing (HR and risk)

Stress and wellbeing are massive risk factors in organisational performance, particularly as traditional sources of competitive advantage have dried up and humans have emerged as the key factor in high-performing organisations.

In addition, several factors now make negative wellbeing more likely, such as continuous use of technology, dual-income households, increasingly sedentary lifestyles and the prospect of a much later retirement age.

Luckily stress and wellbeing are increasingly seen as organisational imperatives, but they have been traditionally underexplored by the risk department, despite the significant effects on motivation and productivity that even low-level physical and mental issues can have.

The challenge for both departments is to better understand the factors in play when it comes to wellbeing issues: with a joined-up approach, there’s more chance of the organisation taking a strategic, well-funded approach to the health and wellbeing of its staff.

User adoption and cost efficiencies (HR and procurement)

When things are bought that employees use and there’s no joined-up approach between HR and procurement, there are likely to be consequences.

For example, a procurement department may decide to shave costs off mobile phone contracts, which is at odds with HR’s policy of empowering people to work remotely, resulting in significant out-of-contract data and voice charges.

On the flipside, if the two departments work together, these issues can be avoided as both functions work towards a solution that makes the most of the procurement department’s cost control and contractual knowledge and the HR department’s understanding of what people need to operate effectively.

There’s also a wider reason HR and procurement should work together: talent management. Historically, procurement was responsible for sourcing the contingent workforce [PDF], while HR managed the permanent workforce. Nowadays the two worlds are blending, with a greater emphasis on gig economy workers, freelancers, and an era defined by ‘total talent management,’ or a joined-up approach to talent management.

When things are bought that employees use and there’s no joined-up approach between HR and procurement, there are likely to be consequences.

This requires a cross-functional approach from procurement and HR, one that is better enabled to manage, track and analyse recruitment, performance and costs across the entire workforce so that the organisation can better manage its human capital needs whatever the future holds.

Data-driven decision-making across the organisation (HR and IT)

HR are not implementation experts, but they do understand process and people. By combining this with the technical expertise from IT, there’s much more chance that new and transformative technologies – such as AI in recruitment – will make a real difference to performance.

The other major benefit from closer collaboration between HR and IT is bringing people data to bear on organisational effectiveness. People data is the missing piece of the puzzle in the organisation’s quest for data-driven decision-making. Historically, HR has not had access to the rich people data that modern HR systems provide, but that is no longer the case.

By integrating people systems with, say, finance systems, the organisation is better able to get an informed view of what specific job roles and tasks are driving revenue and performance. Ultimately, people data gives organisations insight that can be used to optimise how and where work is taking place, as well as who should be doing it.

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